‘Keeping Up with the Joneses’ Goes Online as Many Americans Show off Luxury Purchases

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NEW YORK–(BUSINESS WIRE)–Keeping up with the Joneses could mean the need to match your
brother-in-law’s fancy new car, take a more exotic vacation than your
friend, or even fertilize your way to a greener lawn than your neighbor.
But now this phenomenon has spread to social media – far expanding the
circle of people with whom to keep up. A new survey, conducted by Harris
Poll on behalf of the American
Institute of CPAs (AICPA), found that Americans are caught in a
cycle of feeling envious of friends who boast on social media of lavish
vacations and purchases, while admitting that they also post things
solely because they seem fancy and expensive.

The telephone survey, which polled 1,012 U.S. adults in June, found that
two-thirds of Americans (67 percent) have social media accounts. Of
those, nearly half (48 percent) visit their most frequently used account
more than once a day. This can lead to them being bombarded with images
of their friends on tropical beaches or eating fancy dinners in foreign
cities multiple times a day. In fact, almost half of all Americans (47
percent) with social media accounts have posted photos of their vacation
in the past year.

It’s no wonder that almost four in 10 U.S. adults with a social media
account (39 percent) say that seeing other people’s purchases and
vacations on social media makes them look into a similar purchase or
vacation. And more than one in 10 of these U.S. adults (11 percent) are
acting upon their interest and have taken a vacation or made a purchase
in the last year after seeing someone’s post. However, there is a fine
line between interest and envy and social media is making people feel
more insecure. One in four U.S. adults with a social media account (25
percent) were left feeling envious after seeing someone posting about a
purchase or vacation on social media in the past year, which is likely
not why they created their account.

“Social media has vastly expanded the number of ‘neighbors’ people are
trying to keep up with. That can lead to a feeling of financial
inadequacy and a desire to spend money you may not have,” said Gregory
Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy
Commission. “Some people are purposefully curating a more glamorous
image on social media and, unfortunately, it can have a negative
financial impact on their friends and followers who feel compelled to
keep up with them.”

In fact, more than one in five of U.S. adults with social media accounts
(21 percent) admit they are likely to choose an activity or purchase
based on how their friends and family will view it when they share it on
these social media platforms. And when people are making these financial
decisions to help craft an image online, there’s a chance it’s an
upscale one. The survey found that 14 percent of Americans with social
media accounts say they’ve posted about something specifically because
it seemed fancy or expensive.

And while peer pressure can affect people of all ages, it seems to have
a greater impact upon younger generations on social media. The survey
found that of those with social media accounts, U.S. Millennials (26
percent) are more than twice as likely as Baby Boomers (12 percent) to
say the reaction of friends and family on social media affected their
likelihood to make a purchase or select an activity. In addition, of
those with social media accounts, Millennials (31 percent) were more
than twice as likely as Boomers (15 percent) to feel envious of their
friend’s purchases or vacations when checking their social media account.

“People, in particular those just beginning their careers, would be
better served spending their money maxing out their 401(k) and paying
down debt instead of trying to one-up their friends on social media,”
added Anton. “While smart financial moves may not get the most likes or
retweets, building a solid financial foundation should take priority
over building a social media following.”

The National CPA Financial Literacy Commission offers the following
advice to avoid overspending in an attempt to keep up with the Joneses
either on or offline:

The grass isn’t always greener on the other side of the street. Looks
can be deceiving. You may see the new purchases, but you don’t know the
amount of debt others have and if they are living beyond their means.
Before you buy something, consider the reasons behind the purchase. If
you are doing it to keep up with your friends, perhaps you should
re-think the expenditure.

Do the planning or suggest alternatives. If your friends want to
go to expensive places because they think it will look cool online,
suggest lower cost options or be the person who does the planning. Learn
to say “no” if an activity really stretches your budget.

Limit your time on social media. If digital envy is a problem for
you, try to limit your exposure to once or twice a week. Think about
more productive uses of your time.

Use social media to help you control spending. Although social
media may cause you to spend more than may be wise, there
are new apps that can actually use the power of peer pressure to
your advantage. In addition, the AICPA has a number of social media
accounts that can help you make better financial decisions. To learn
more, see the social
media page for AICPA’s financial literacy initiatives.

For more information on the AICPA survey or to speak to a member of the
National CPA Financial Literacy Commission, contact Marc Eiger at
212-596-6042, meiger@aicpa.org, or
James Schiavone at 212-596-6119, jschiavone@aicpa.org.

About AICPA Financial Literacy Initiatives

360 Degrees of Financial literacy (www.360finlit.org)
is a national volunteer effort of the nation’s Certified Public
Accountants to help Americans understand their personal finances and
develop money management skills. The AICPA and Ad Council have developed
the Feed the Pig program (Feed
the Pig), a national and localized PSA
campaign designed to improve financial literacy among Americans aged
25–34 by encouraging them to make savings a part of their daily lives.

Methodology

Harris Poll has conducted an annual survey for the AICPA since
2007. This year’s poll was conducted by telephone within the United
States between June 23-26, 2016, among 1,012 adults (505 men and 507
women aged 18 and over), including 511 interviews from the landline
sample and 501 interviews from the cell phone sample.

About the AICPA

The American Institute of CPAs (AICPA) is the world’s largest member
association representing the accounting profession, with more than
412,000 members in 144 countries, and a history of serving the public
interest since 1887. AICPA members represent many areas of practice,
including business and industry, public practice, government, education
and consulting.

The AICPA sets ethical standards for the profession and U.S. auditing
standards for private companies, nonprofit organizations, federal, state
and local governments. It develops and grades the Uniform CPA
Examination, and offers specialty credentials for CPAs who concentrate
on personal financial planning; forensic accounting; business valuation;
and information management and technology assurance. Through a joint
venture with the Chartered Institute of Management Accountants (CIMA),
it has established the Chartered Global Management Accountant (CGMA)
designation which sets a new standard for global recognition of
management accounting.